Mortgage Company conveyancing panel conditions re Manorial Rights Indemnity Insurance
Coventry BS and Natwest, in common with most lenders, have their own requirements when it comes to manorial rights indemnity insurance. This page is designed to help conveyancing lawyers on the numerous lender conveyancing panel where the title to be charged incorporates manorial rights. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each mortgage company, whether it be Barclays, Skipton or Godiva Mortgages. The content on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Lloyds TSB and HSBC like many lenders, obligations require that where manorial rights indemnity insurance is to be put on risk:
- the manorial rights indemnity insurance policy must be effected without charge to the mortgage company
- the minimum level of cover for the policy must meet the requirements for the bank (See Part II Handbook requirements )
- your firm are responsible for approving the terms of the manorial rights policy on behalf of the bank
- your practice must explain to the mortgagor that the borrower is obliged to adhere to any conditions of the manorial rights indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the policy
- the manorial rights indemnity insurance policy should not contain terms that you recognise would void or compromise the interests of the lender
- the manorial rights indemnity insurance policy should always be for the benefit of the mortgage company and, if possible, for the benefit of the mortgagor and any subsequent registered proprietor or mortgage company. Where the mortgagor will not be protected by the manorial rights indemnity insurance policy, you must advise the mortgagor of this fact.
- your practice must provide a duplicate of the manorial rights indemnity insurance to the borrower and explain to the borrower why the manorial rights indemnity insurance policy was effected and that additional insurance might be mandatory if there is further borrowing against the mortgaged property
- your practice is required to disclose to the insurer all relevant information which you have gathered
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Barclays plc | Higher of purchase price or valuation |
| Darlington Building Society | The higher of value or purchase price of the property. |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| Investec | The open market value of the property according to the valuation report. |
| JPMorgan | 110% of principal sum. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Lloyds TSB Scotland | The value of the property |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| Molo Finance Buy to Let | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgages. |
| NRAM Ltd | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| National Westminster Bank | An amount equal to the value of the property. |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| St James Place | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Yorkshire Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
Non lender-specific considerations
The full terms, conditions and exclusions for manorial rights indemnity insurance are set out in the policy document. Conveyancing solicitors are obliged to point your non-lender client to the manorial rights indemnity insurance policy document. Manorial Rights indemnity insurance is designed to afford indemnity in respect of the risks set out in the policy schedule - so it’s important to check the schedule to determine that it is in order. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the manorial rights indemnity insurance policy. Again, please check that this is as you expected.Manorial Rights Contingency insurance: Important aspects and benefits:
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Manorial Rights indemnity insurance Cover normally includes- Expenses for works (including professional fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the manorial rights insurance, to the extent that such costs are rendered abortive by court order.
- All sums paid with the written consent of the insurance company to liberate the land from the risks specified in the manorial rights policy.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- The out of pocket expenses of altering or demolishing all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Reimbursement for compensation incurred in any action concerning the risks specified in the manorial rights indemnity insurance, including legal and associated costs.
- Loss in market value resulting from the successful enforcement of the risks specified in the manorial rights indemnity insurance.
Due diligence should extend to checking that the answers on the application form are correct. Regardless of how remote a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly prior to any claim being paid out.
Manorial Rights Indemnity Insurance has limitations - Further considerations
Manorial Rights Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that manorial rights indemnity cover will not necessarily be the answer. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.